Marriott Hotels and Wagamama named on minimum wage non-compliance list

Asian restaurant chain Wagamama and international hotel group Marriott Hotels (pictured) are among the 179 employers named by the Department for Business, Energy and Industrial Strategy (BEIS) for failure to pay employees the national minimum wage and the national living wage.

Wagamama, which topped the government’s 14th list of organisations that have underpaid staff the minimum wage, failed to pay £133,212.42 to 2,630 employees. Marriott Hotels, which ranked second on the list, failed to pay £71,722.93 to 279 employees.

Thursday UK Limited, trading as restaurant organisation TGI Friday’s, was placed third on the list for failing to pay 2,302 employees a total of £59,347.64, while Birmingham City Football Club featured on the list for failing to pay 534 employees £5,653.03

Other organisations included on this month’s list include womenswear retailer Karen Miller Fashions, which failed to pay £9,847.20 to 28 employees, and Wright Leisure Limited, trading as Xercise4less, ranked fifth on the list for failing to pay 240 employees £54,290.37.

The government’s naming and shaming scheme, which came in to effect in October 2013, names employers which have underpaid staff by paying them less than the national minimum wage and national living wage rates. These employers are issued with a notice of underpayment, unless employers meet one of the exceptional criteria or have arrears of £100 or less. Organisations that feature on the published list are required to back pay arrears of wages to affected employees, and can face financial penalties of up to 200% of arrears, capped at £20,000 per employee, or prosecution in the most serious cases.

Employers on today’s (9 March 2018) list have been fined £1.3 million in total, and around 9,200 UK employees are expected to receive back pay amounting to £1.1 million.

Sectors that particularly came under fire during this naming and shaming round include the hospitality sector, where 43 organisations are required to back pay 5,726 employees £460,459.00, the hairdressing industry, where 19 businesses failed to pay 152 employees £43,938.00, and the retail sector, with 18 organisations that neglected to pay 85 employees a total of £27,332.00.

Since the scheme’s introduction in 2013, more than £9 million has been paid in back pay to 67,000 employees and a total of 1,700 employers have been fined £6.3 million overall. This year, the government committed to spend £25.3 million on minimum wage enforcement for 2017-2018.

Andrew Griffiths, business minister, said: “The world of work is changing and we have set out our plans to give millions of [employees] enhanced rights to ensure everyone is paid and treated fairly in the workplace.

“There are no excuses for short-changing [employees]. This is an absolute red line for this government and employers who cross it will get caught; not only are they forced to pay back every penny but they are also fined up to 200% of wages owed.

“[This] naming round serves as a sharp reminder to employers to get their house in order ahead of minimum wage rate rises on 1 April.”

Bryan Sanderson, chairman of the Low Pay Commission (LPC), added: “As the national living wage and national minimum wage rates rise on 1 April, it is vital that [employees] understand their rights, and employers their obligations.

“The Low Pay Commission is pleased to see the government maintaining the momentum of its minimum wage enforcement. The recent announcement that all workers will have a right to payslips stating the hours they have worked, an idea originally proposed by the LPC, is a positive step.”

Tim Goodwin, solicitor at Winckworth Sherwood, said: “The national minimum wage sets an absolute floor on what [an employee] must be paid. It amounts to an annual full-time salary of approximately £13,600, at its highest rate, is mandatory and cannot be contracted out of. The number of high profile employers included in this latest ‘naming and shaming’ report shows the scope of the government’s investigatory powers and the inevitability of negative publicity that now comes with being found to be in breach.

“The government’s powers of enforcement allow compliance officers to commence an investigation and remove information from an employer’s premises with little if any warning and conduct a very thorough analysis of records. Businesses that circumvent the regulations, whether by simply paying below the minimum wage, improperly offsetting other costs or by understating hours worked, will get found out. As well as being ‘named and shamed’, businesses can face fines up to £20,000 and even criminal sanctions. Employees who have been underpaid can also bring claims, seeking to recover underpayments going back several years.”